Safe and Sound

VALLEY FIRST

MODESTO, CA
4
Star Rating
MODESTO, CA-based VALLEY FIRST is an NCUA-insured credit union founded in 1956. Regulatory filings show the credit union having assets of $601.9 million, as of June 30, 2017.

Members have $354.3 million on deposit tended by 171 full-time employees. With that footprint, the credit union currently holds loans and leases worth $354.3 million. VALLEY FIRST's 68,028 members currently have $532.4 million in shares with the credit union.

Overall, Bankrate believes that, as of June 30, 2017, VALLEY FIRST exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's a look at how the credit union faired on the three key criteria Bankrate used to evaluate U.S. credit unions.

WHAT IS
SAFE AND SOUND?

Find out

THE INSTITUTION'S SCORE

Capital Score

Capital is an important measurement of a credit union's financial strength. It acts as a bulwark against losses and as protection for members when a credit union is experiencing financial trouble. From a safety and soundness perspective, the higher the capital, the better.

VALLEY FIRST fell short of the national average of 15.26 on our test to measure the adequacy of a credit union's capital, scoring 12 out of a possible 30 points.

VALLEY FIRST's capitalization ratio of 10.00 percent in our test was lower than the average for all credit unions, a sign that it could be less resilient in a crisis than its peers.

Asset Quality Score

Bankrate uses this test to determine the impact of problem assets, such as unpaid loans, on the credit union's reserves set aside to cover loan losses, as well as overall capitalization.

A credit union with lots of these types of assets may eventually be required to use capital to absorb losses, cutting down on its cushion of equity. Many of those assets are also likely to be in non-accrual status and no longer earning interest for the credit union, pushing down earnings and elevating the risk of a future failure.

On Bankrate's asset quality test, VALLEY FIRST scored 40 out of a possible 40 points, beating the national average of 38.15 points.

The credit union's ratio of problem assets was 1.00 percent in our test, below the national average and potentially indicative of superior financial strength compared to other credit unions.

Earnings score

A credit union's earnings performance has an effect on its long-term survivability. A credit union can retain its earnings, expanding its capital buffer, or use them to address problematic loans, potentially making the credit union more resilient in tough times. However, credit unions that are losing money are less able to do those things.

On Bankrate's earnings test, VALLEY FIRST scored 4 out of a possible 30, falling short of the national average of 10.31.

VALLEY FIRST had an earnings ratio of 2.00 percent in our test, above the average for all credit unions, a sign that it's doing better than its peers in this area.

WHAT IS SAFE & SOUND?

Bankrate.com's Safe & Sound Ratings provide a star rating system to evaluate the current financial status of financial institutions. The information gathered about banks, credit unions and thrifts is updated as set forth in the Terms of Use of Safe & Sound Ratings and Reports. The Safe & Sound Ratings information is grouped by categories of banks, thrifts and credit unions.

Scoring methodology

Bankrate.com evaluates the financial condition of institutions and assigns a one- to five-star rating for each with five stars representing the highest rating. Institutions with satisfactory performance will generally receive a rating of three or more stars. The majority of institutions fall into the three- to four-star range. An institution with an "NR" rating may be too new to rate or may have limited the publicly available information in their regulatory filings. The "NR" is not an indication of financial strength or weakness. The Safe & Sound rating is believed to be reliable, but the information is not guaranteed. In addition, events since the information was collected may have altered the institution's financial condition.